National Party showing leadership over housing

"NZ National Party showing leadership
with housing affordability crisis".

On 22 February
National Party Housing Spokesman Phil Heatley wrote to the
Chairperson of Parliaments Commerce Select Committee
requesting an Inquiry in to Housing Affordability, with
broad and open terms of reference .

The Committee
comprises four Labour Government Members, four National
Members and Gordon Copeland of United Future. Mr Copeland
supports the need for an Inquiry provided it focuses on the
issue of land supply.

Prime Minister Helen Clark stated
Monday that the Government was working through the issues
and expected to make an announcement next week, on the steps
that needed to be taken in addressing this issue of housing
stress. She said "the focus is on supply".

The Labour
Government Housing Minister Hon Chris Carter had earlier
been focused on the supply aspect of the housing crisis, but
had recently indicated land supply was not his concern and
indicating a preference for higher density solutions.

The
2007 3rd Edition Demographia International Housing
Affordability Survey released 22 January this year assessed
housing stress within 159 major urban markets of the United
Kingdom, United States, Ireland, Canada, Australia and New
Zealand.

All the major urban markets of New Zealand were
found to be severely unaffordable with Auckland at 6.9
time's annual household earnings, Wellington 5.4 and
Christchurch 6.0.

The international standard for housing
affordability is that housing should not cost any more than
three times annual household earnings. Most New Zealand
urban markets achieved these standards a generation ago and
41 major urban markets within Canada and the United States
retain this affordability rating today.

The Demographia
Survey found that the major reason why urban markets are not
achieving affordable ratings is because they strangle land
supply around their urban fringe. The steps required to
restore housing affordability are set out within this years
Demographia Survey.

"Phil Heatley of National and Gordon
Copeland of United Future must be commended for their
concern for young New Zealanders, in pressing for a
Parliamentary Inquiry of this nature" said Hugh Pavletich,
co author of the Demographia Survey, adding "It is
unfortunate the Housing Minister Chris Carter appears more
interested in protecting the bureaucratic interests of a
small constituency within the ranks of Local Government,
rather than the interests of unnecessarily disadvantaged
young New Zealanders".

Mr Pavletich is of the view that
the price of sections around the urban fringes is grossly
excessive. Real Estate Institute statistics for December
2006 indicate that the median price for a section is
$165,000, double what it was five years ago. Prices of
$200,000, $300,000 and above are not uncommon. This has
meant that most young people have been priced out of housing
and those that are obtaining housing are getting much poorer
quality than they should be.

"If you get the land wrong,
everything else is wrong" said Mr Pavletich.

In normal
affordable markets that achieve the affordability standard
of three household earnings, around 25% of the cost should
be land, with the balance spent on the actual development of
the new home. Currently within the severely unaffordable New
Zealand urban markets, in excess of 50% is being spent to
buy the section, forcing a substantial reduction in the
funds available for the development of the new
home.

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